According to Epic Games, Google bribed phone and gaming companies to avoid a $1 billion hit on the App Store

According to Epic Games, Google bribed phone and gaming companies to avoid a $1 billion hit on the App Store

Tech Highlights:

  • Google said the lawsuit remains baseless and mischaracterizes business conversations. A trial has not been scheduled. Among new details a judge ordered be unredacted, Google in 2019 estimated up to $6 billion in Play revenue and $1.1 billion in profit would be at risk in 2022 alone if Epic’s approach spread and alternative stores found success, according to the lawsuit. But Google avoided the feared hit.

  • Epic Games, the producer of “Fortnite,” revealed data regarding contracts it claims Alphabet Inc’s Google made with phone makers and other major video game firms to avoid losing $1.1 billion in yearly app store revenues on Thursday. Epic Games debuted “Fortnite” in 2018 through its website and a deal with Samsung Electronics Co, avoiding Google’s Play Store, which costs developers up to 30% of their sales in royalties. Epic claimed in an antitrust complaint launched against Google last year that Google was afraid of other firms replicating Epic and tried to prevent it by establishing illegal barriers.

In 2019, it launched “Premier Device Program” to pay phone makers to ensure the Play Store’s exclusivity and limit the appeal of partnerships similar to what Epic had reached with Samsung, according to the newly released details. Premier partners received 12% of Google’s search revenues from their phones, compared with 8% traditionally, according to the filing. Some partners, including LG Electronics Inc and Lenovo Group’s Motorola, also received 3% to 6% of Google “Play spend.”

Separately, Google in 2019 as part of an effort dubbed “Project Hug” approved spending “hundreds of millions of dollars” on over 20 top developers in marketing and other benefits to keep them on the Play Store, according to the details. The “vast majority” accepted Google’s offer by December 2020. According to the lawsuit, Google internally called the new deals a success in stopping a “contagion” of developers sidestepping the Play Store.

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